Dublin-based SMBC to buy aircraft leasing rival Goshawk in €1.5bn deal

Aircraft lessor SMBC Aviation Capital is buying Irish rival Goshawk in a €1.5 billion deal that will create a €36 billion aviation finance business.

SMBC and Goshawk, both Dublin-based, buy aircraft and lease them to airlines around the world.

The pair confirmed that SMBC will buy Goshawk for $1.575 billion (€1.51bn) from its 50-50 owners, Hong Kong-based Chow Tai Fook Enterprises (CTFE) and NWS Holdings.

SMBC will own Goshawk’s leasing business, assets and liabilities, giving the deal an enterprise value of $6.7 billion.

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Japanese-owned SMBC will emerge as the world's second-biggest aviation lessor by the number of aircraft it owns, with assets totalling $37 billion (€36bn), the company said. It will acquire 176 aircraft from Goshawk, giving it a total fleet of 709; with 82 per cent new narrowbody planes, mainly Airbus A320s and Boeing 737s. Used mostly for short-haul journeys, these are most in demand with airlines. The combined entity will have a further 261 of these aircraft on order.

SMBC's shareholders, Japan's Sumitomo Mitsui Financial Group and Sumitomo Corporation, strongly support the deal, the Irish company said on Monday.

Peter Barrett, SMBC's chief executive, said the transaction would allow it better serve customers boosting shareholders' value.

Masaki Tachibana, president of Sumitomo Mitsui Finance and Leasing, said his group's purchase of SMBC in 2021 had proved successful.

“The shareholder is fully supportive of the proposed acquisition of Goshawk, which will further cement the group’s position as a leading player in the aviation financing sector,” he added.

Approval

The deal is subject to competition regulators’ approval in different jurisdictions where the two companies trade. If the transaction is completed the newly-enlarged SMBC company will be incorporated and headquartered in the Republic.

Goshawk was established in 2013 and grew to become one of the top-10 players in its industry.

Ruth Kelly, its chief executive, dubbed the deal the beginning of a new chapter for the business. "Market trends point to growth in aircraft leasing with great opportunities for people involved in aviation," she added.

Erik Ma, NWS chief executive, noted that it reflected what Goshawk had accomplished "under both the teams' and shareholders' stewardship".

CTFE is the private investing holding company of the Cheng family, who control Chow Tai Fook Jewellery Group, one of world's biggest jewellery retailers. It is also the biggest shareholder in Hong Kong-listed New World Development Company.

NWS, Goshawk’s other shareholder, is New World Development’s investment arm, with interests in toll roads, aircraft leasing, building and insurance.